Arby’s History
Arby’s has a rich history from 1964, founded by Forrest Raffel and Leroy Raffel in Boardman, Ohio. The name “Arby’s” is derived from “R.B.,” which stands for Raffel Brothers. The restaurant initially focused on serving high-quality roast beef sandwiches, which quickly gained popularity among customers.
Arby’s expansion began in the 1970s, and by the end of that decade, it had already grown to over 500 locations. During the 1980s and 1990s, the restaurant chain continued to innovate and diversify its menu, introducing new items like curly fries, chicken sandwiches, and various deli-inspired offerings.
In the early 2000s, Arby’s underwent several ownership changes, which impacted its growth trajectory. However, the brand continued to evolve, adapting to changing consumer preferences and market demands.
In 2011, Arby’s underwent a revitalization strategy under the ownership of Roark Capital Group, which aimed to enhance the brand’s image and menu offerings. This strategy helped reposition Arby’s as a fast-casual restaurant known for its premium quality meats and sandwiches.
Why Invest in Ground Lease and NNN Lease of Arby’s?
Investing in Arby’s ground lease and triple net (NNN) lease properties offer compelling reasons:
1) Arby’s NNN Property Investment: Stable income
Arby’s is a well-established brand with a loyal customer base, providing investors with a steady and reliable income stream. Ground and NNN leases offer consistent cash flows over an extended period.
2) Arby’s NNN Property Investment: Established tenant
As a recognized name in the fast-food industry, Arby’s reduces the risk of vacancy or lease default, making it a desirable tenant for the property.
3) Arby’s NNN Property Investment: Low management responsibility
Ground and NNN leases place the responsibility of property maintenance and expenses on the tenant, freeing landlords from day-to-day management obligations.
4) Arby’s NNN Property Investment: Favorable lease terms
Long lease terms with built-in rent escalations provide stability and the potential for rental income growth.
5) Arby’s NNN Property Investment: Real estate value
Arby’s strategic locations, often in high-traffic areas, can contribute to the property’s value appreciation, offering potential capital gains for investors.
Pros and Cons of Arby’s Ground Lease and NNN Lease Investment
Pros:
1. Stable income from a well-established brand with a loyal customer base.
2. Arby’s recognized name reduces vacancy and lease default risks.
3. Minimal management responsibility for landlords due to the tenant’s obligations.
4. Long lease terms provide stability and potential for rental income growth.
Cons:
1. Lease renewal risk when the lease term expires.
2. Dependency on Arby’s success and operational performance.
3. Market competition and consumer trends may impact profitability.
4. Limited control over property decisions.
5. Real estate investments carry inherent economic and market risks.
Engaging in thorough due diligence and considering factors such as location, lease terms, tenant strength, and investment strategy is crucial. Seek advice from real estate professionals and financial advisors to effectively align your investment goals and risk tolerance.
